Renault and Geely have a long history of “CP” scandals
Renault, which has been silent for a long time, has recently attracted the attention of the industry due to a news.
A few days ago, it was reported that Renault Group would like to seek help from Geely Automobile, hoping to use Geely Automobile’s CMA structure to produce fuel vehicles.
In response to this matter, the ” Daily Business News ” reporter asked the relevant person in charge of Renault China, and the other party only said: “Please pay attention to the official information. If you have the latest news, you must share it with you as soon as possible.”
“May be double Founder in contact, should be a major help in the search for Renault auspicious aspects. Renault is currently developing market in China is not smooth, if lucky choose at this time to cooperate with it, the cost will be relatively low, the right to speak will be more High.” said Cao He, president of Quanlian Automobile Investment Management (Beijing) Co., Ltd.
Renault and Geely have “intersection”
It is worth mentioning that Renault and Geely have a long history of “CP” scandals.
In early January, Geely Holding Group’s luxury sports car brand lute Adams announced that Renault Group, signed a memorandum of cooperation in the fields of research, including with Renault Alpine sub-brand electric sports car joint research and development.
It is understood that Lotus and Alpine teams will use their respective resources, expertise and equipment in the UK and France to unite the engineering, design and research and development capabilities of both parties to conduct a comprehensive feasibility study of the new electric sports car.
Not only that, in early April this year, Geely Automobile announced that it has become a new member of the IATF International Automotive Working Group. The reporter learned that the IATF is a global automotive industry standardization organization dedicated to establishing an internationally unified automotive industry quality management system standards and quality tools. Its members include 5 non-profit organizations and 9 automotive companies, including Renault Group.
Picture source: every photo by reporter Zhang Jian (data map)
According to Cui Dongshu, secretary general of the National Passenger Car Market Information Association, Geely Automobile has an advantage in the industrial chain and can help Renault’s sustainable development in the Chinese market. “Renault still has certain resources and advantages as a global brand, and Geely can also use these advantages for better layout and development.” Cui Dongshu said.
Cui Dongshu believes that Renault’s idea may be to use Geely’s CMA structure to produce fuel vehicles and use the revenue generated by fuel vehicles to vigorously develop pure electric vehicles. “Renault’s current state of development is relatively passive, but it has a certain accumulation in the field of electric vehicles, and the transition to new energy is a very critical step for it.” Cui Dongshu said.
Brilliance Renault is still out of the predicament
In fact, Renault’s life in China has not been peaceful since the previous announcement of “breaking up” with Dongfeng Motor and withdrawing from the Chinese passenger car market. In June of this year, Renault also reported that it would withdraw from the joint venture company Brilliance Renault (Brilliance Renault Jinbei Automobile Co., Ltd.).
“Everyone is saying that now, but there is no very accurate news yet. At present, it seems that the future is uncertain.” A source close to Brilliance Renault told reporters.
When reporters asked Renault China to verify the rumors about withdrawing from Brilliance Renault, the other party only stated that “the news is not true.”
Public information shows that Renault Brilliance was established in December 2017 and was jointly established by Renault Group and Brilliance Automotive Group. Among them, Brilliance Automotive Group holds 51% of the shares, and Renault Group holds 49% of the shares.
After “breaking up” with Dongfeng Motor, Renault Group stated that it will focus on two areas: electric vehicles and light commercial vehicles. Among them, the electric vehicle business will be carried out through Ejet (Ejet New Energy Automobile Co., Ltd.) and Jiangling New Energy (Jiangling Group New Energy Automobile Co., Ltd.), while light commercial vehicles will be mainly handled by Brilliance Renault Jinbei.
The volatility of Brilliance Renault has also aroused more attention from the outside world about its employee placement. In fact, before that, Brilliance Renault had been layoffs many times. As early as 2020, there was news that Renault Brilliance had launched the layoff plan twice.
Image source: Brilliance Renault official website
However, at that time, the relevant person in charge of Brilliance Renault responded in an interview with reporters: “Neither the company nor the employees have received relevant information.”
At present, the layoffs of Brilliance Renault have begun again. “There is no real layoff, but many people have already left. (Maybe) the shareholders have not settled on many things. I don’t know what happened.” The above-mentioned source close to Brilliance Renault said.
The reporter learned that the resignation includes the heads of various departments of Brilliance Renault. It is also reported that many resigners have gone to Great Wall Motors . However, this statement has not been confirmed by both parties.
However, it is worth noting that Qixinbao data shows that from 2018 to 2020, the number of people in the social insurance of Brilliance Renault has been reduced from 3766 to 2,549, and a total of 1,217 people have been reduced. The number of reductions has exceeded one-third of the number of people in social insurance in 2018. one.
New models have not been introduced
Since its establishment in 2017, Brilliance Renault has gone through more than three years. But in the past three years, the development of Brilliance Renault has not been very smooth. Although it still has the background of Jinbei cars, the annual sales of Brilliance Renault have been declining year by year since its establishment.
According to data disclosed by Brilliance China (01114.HK), the sales volume of Renault Brilliance in 2018 was 43,000 vehicles, down nearly 30% year-on-year; the sales volume in 2019 was 40,200 vehicles, a decrease of 6.5% over the same period; the sales volume in the first half of 2020 was approximately 1.17 10,000 vehicles, down 42% year-on-year.
At the beginning of the establishment of the joint venture, Renault Brilliance has stated that it plans to develop synergistically under the three brands of Renault, Jinbei and Huasong, mainly producing and selling light commercial vehicles, and achieving annual sales of 150,000 vehicles and launching 7 new models by 2022. In terms of product development, Renault Brilliance will also inject Renault’s technology to develop new products, including Renault’s existing models and new energy products for new models. After 2020, Renault’s master, trafic, kangoo and other models will be introduced to the Chinese market one after another, and the products will be produced under the Renault quality management system. In the future, Brilliance Renault will also launch electric models to establish connected car services adapted to the Chinese ecosystem and local partners.
But the original vision of Brilliance Renault has not been realized smoothly. In November 2020, the first LCV after Brilliance Renault’s joint venture, Jinbei Sea Lion King, was officially launched with a starting price of RMB 84,900. “This car is actually a Jinbei car, only the exterior uses Renault’s design.” A Brilliance Renault dealer in Beijing told reporters.
Image source: Image courtesy of the company
With the new product effect of Sea Lion King, the sales of Brilliance Renault will improve in 2021. Data show that in March, Brilliance Renault’s sales increased by 141.6% month-on-month and 46% year-on-year.
“Renault’s car has not been released, and a lot of work has been done on the introduction, but it has not been launched. Everything is to be determined. The specific reason is not clear.” The above-mentioned source close to Brilliance Renault said.
In the strategic plan released by the Renault Group, Renault Brilliance has become an important starting point for its efforts in the field of light commercial vehicles, and stated that it will focus on the development of local brand models. Before 2023, it plans to launch a full range of light commercial vehicles, including 5 models. Comprehensive coverage of small, medium and large vans (H-Van, M-Van, S-Van), including electric vehicles.
Based on this, the current dealers of Brilliance Renault are still waiting for good news. “We have also heard about the shareholders, but before (manufacturers) said that Renault will have new cars coming in, and new energy vehicles will be launched soon. We all think (Renault) should not withdraw.” The dealer of Brilliance Renault said.
Renault’s dilemma in China needs to be resolved
“Brilliance Renault this joint venture has been not do it, behind the brilliance technically insolvent bring industry lack of trust.” Choi Dong-tree view, Brilliance Renault originally had a good foundation, Jinbei Automotive ( light off ) was in a leading position, but follow-up did not Strengthen independent technology research and development to ensure the continuous improvement of product strength, but passively respond to regulations and fierce competition, and finally have today’s dilemma.
When Sea Lion King went public, Brilliance Renault Jinbei CEO Shi Gemai once said: “The development of Jinbei brand in the past has tended to be slow. What the joint venture company has to do is to speed up as much as possible, launch newer products as quickly as possible, and quickly adapt to market changes and changes. demand in the next two and a half or so, the Brilliance Renault will launch more new models the Renault into the elements, while the field of electric vehicles will be added soon cloth bureau. “
“Renault products are performing well in Europe, but they can’t do it in China. This is mainly because they lack the ability to improve the Chinese market and the products are not competitive.” Cui Dongshu analyzed that from the current situation, whether it is Brilliance Renault It is still Renault, the situation is more difficult, the next step does not rule out the possibility that Renault will completely withdraw from the Chinese market and become the next Suzuki.
Picture source: every photo by reporter Zhang Jian (data map)
In March of this year, the Renault Group announced the adjustment of China’s organizational structure, appointing Su Weiming as the CEO of Renault China, and Shigemai as the chief operating officer of Renault China (and also the CEO of Renault Jinbei Brilliance), aiming to strengthen its strategic position in the Chinese market. This move is regarded as an important step for Renault to seek a breakthrough in China. However, until the scandal with Geely Auto, Renault China has not yet officially announced a new strategic plan.
In the new “Renaulution” strategic plan announced at the beginning of this year, the Renault Group reiterated its China strategy and stated that “China plays an important role in the Renault Group’s global strategy.” The current strategic focus of the group is electric vehicles and light commercial vehicles. In the automotive field and the development of local brand models.
The Renault Group said that in the future, the company will reshape its business model in China, use its assets in China, and at the same time use China’s competitive industrial ecosystem to develop new mobile solutions for the Chinese and global markets. At the same time, Renault is also cooperating with the Lotus brand to develop the next generation of electric sports cars. In addition, in the joint venture company Jiangling New Energy controlled by Renault, Renault will develop an A+ class sedan for Europe for travel solutions, taking into account personal, family travel and online car-hailing services.
Want to transform into a car-enabling technology company?
In addition to the fluctuations in the Chinese market, Renault’s global performance is not optimistic. Public data shows that in 2020, Renault Group revenue fell 22% to 43.5 billion euros, slightly lower than the estimated value; net loss of 8 billion euros (about 62.6 billion yuan), the largest annual loss in history.
At the beginning of this year, Renault released a new strategic plan for “Renaulution”, aiming to adjust the strategic focus of the Renault Group from the pursuit of sales volume to more emphasis on value creation.
It is reported that the plan is divided into three phases and started at the same time. Among them, the “Resurrection” revival phase is from now to 2023, focusing on profit margins and cash appreciation capabilities; the “Renovation” innovation phase is from now until 2025, continuously updating and enriching the product matrix, and enhancing brand profitability; The “Revolution” transformation phase is after 2025, and the business model will be shifted to the fields of technology, energy and travel.
It is understood that Renault will promote the implementation of the strategic plan through a new organizational structure, and set a new financial target, that is, by 2023, the group’s operating profit margin will reach more than 3%, and the accumulated auto operating free cash flow ( 2021-23) about 3 billion euros, and reduce investment (R&D and capital expenditures) to about 8% of revenue; by 2025, the group’s operating profit margin will reach at least 5%, accumulating auto operating free cash The flow (2021-25) is about 6 billion euros.
Luca de Mayo, CEO of Renault Group, said: “Renaulution is about the transformation of Renault Group’s development strategy from sales to profit. It is a far-reaching change in Renault’s business model. We will simplify our business and adjust the scale when necessary. Redistribute resources to high-potential products and technologies. This efficiency improvement will inject impetus into Renault’s future product lineup, especially in terms of technological content, electrification and competitiveness. We will start from a technology-enabled car The company has transformed into a technology company empowered by cars.”
According to the plan, the Renault Group’s model platforms will be optimized from 6 to 3, and the powertrain will be optimized from 8 series to 4 series. All models launched on the existing platform will enter the market within 3 years; the production capacity will be adjusted from 4 million units in 2019 to 3.1 million units in 2025; the total cost control will be increased to 2.5 billion euros in 2023. The annual target is 3 billion euros (including fixed cost changes); by 2023, variable costs will be reduced by 600 euros for bicycles; by 2025, investment (R&D and capital expenditure) will be reduced from about 10% of revenue to 8 %the following.
At the product level, by 2025, the Renault Group plans to launch 24 products, half of which are distributed in the C-level and D-level market segments, including at least 10 pure electric vehicles.
Although the Renault Group has repeatedly stated that China is the world’s largest automotive market and has always been a strategic market for the Renault Group, the Renault Group will reshape its business model in China to achieve better development. However, in the face of the predicament, how to achieve a breakthrough and regain the confidence of Chinese consumers in the brand has become the primary issue that Renault has to actively think about and respond quickly.
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